Here at HomeLet we know the importance of protecting your rental investment.
Sadly, even the best tenants can fall on hard times and most rent defaults are due to an inability to pay when circumstances change, rather than a refusal.
It’s natural to be sympathetic but the rental income still needs to be paid. In these instances, it’s good to know that you’re protected and that’s where letting agents will offer a rent protection service for their landlords. But what’s this protecting you from?
Here at HomeLet we’re used to dealing with rent protection claims so we’ve taken a look at some of our stats for the past three years…
Average possession claim cost (outside London) = £1,045.60*
Average possession claim cost (in London) = £1,742.37*
So, as you can see, the costs of evicting a tenant in arrears can soon mount up, especially when you look at the increase in court fees over the past few years…
Court application fees, since 2013, have increased on average by 225%
In the UK, it’s become commonplace for tenants to remain in occupation of properties right the way through to being evicted. This means that obtaining a possession order from the courts is often not enough and the recent increase in enforcement fees means that it’s now costing landlords even more to obtain possession of their properties.
Once possession is obtained, the landlord’s then faced with taking further action to enforce any money judgement awarded for the rent arrears and/or costs. Again, the latest court fee increase also extends to these actions and so the legal costs in both obtaining possession and then attempting to recover any outstanding balance can mount up even more.
Time is money…as they say!
The Ministry of Justice published its latest statistics in August on county court possession claims. Within this is a specific section on landlord claims, in which they quote an average time from claim being issued to possession by county court bailiff being 41 weeks. This is higher than the same quarter in 2015 (Q2, April – June) and this time frame doesn’t take into account the issuing of notices and their subsequent notice periods.
Notwithstanding this, HomeLet has an average duration of 15.8 weeks from the point of accepting the claim through to obtaining position via an eviction. With that said however, only 35% of our cases result in having to obtain possession via an eviction as the pro-active work we do throughout the claim means we’re able to obtain possession by the tenants vacating of their own accord. This, on average, takes us just 7.3 weeks to achieve.
Rent protection case studies
Location: Sheffield, S10
Summary: HomeLet was notified of a claim, as a result of the tenant and guarantor not paying the monthly rent on the property, the rent for which was £325.
The claim was assessed and accepted within three days and a demand letter was issued to both the tenant and guarantor on the same day we received instruction from the managing agent.
Following our demand letters, the guarantor contacted the managing agent and cleared the outstanding balance in full. Unfortunately, the tenant then missed the following rental payment and our solicitors again issued a demand letter. This time there was no response and our solicitors subsequently issued a notice seeking possession, in accordance with Section 8 of the Housing Act 1988 (as amended). Following this notice, the tenant/guarantor cleared the full outstanding balance and vacated the property.
Location: Belper, DE56
Summary: A claim was received from the managing agent on behalf of the landlord as a result of the tenant’s failure to pay the rent.
The claim was assessed and accepted within five days and a demand letter issued by our solicitors the same day, as authorised by the managing agent.
A notice seeking possession, in accordance with Section 8 of the Housing Act 1988 (as amended), was served and subsequently possession proceedings were issued. Following the court hearing, in which possession was granted within 14 days, the tenant failed to vacate the property and we subsequently instructed a county court bailiff to evict them.
The tenant was evicted successfully and throughout the claim we continued to pay rent guarantee and vacant possession payments to the total value of £9,000. The rent in this particular case was £1,400pcm.
*excludes any claims for unpaid rent